CapitaLand expects H1 operating patmi to fall 25-35 per cent

Singapore

CAPITALAND expects its first half-year net profit to be "materially and adversely" affected, based on preliminary estimates.

Operating patmi - which refers to profit from business operations excluding any gains or losses from divestments, revaluations and impairments - is expected to decline by 25 per cent to 35 per cent from the S$361.3 million it posted for the first six months of last year, the property group said.

Cash Patmi, comprising operating Patmi and portfolio gains, is expected to tumble by 40 to 50 per cent, from S$496 million previously.

CapitaLand said that starting this year, it will value its properties annually in December. This means that any revaluation gains or losses on investment properties will only be recorded in its full-year results. For H1 2019, the group had recorded revaluation gains of S$379.4 million.

"Nevertheless, CapitaLand will continue to recognise its share of any revaluation gains or losses recorded and announced by its listed investments," it said in a statement on Monday.

The group expects to release its financial results for the first half ended June 30 in early August.

Last month, CapitaLand said it would further waive and potentially defer rent for qualifying small and medium-sized enterprise (SME) tenants, though this will lead to an "adverse impact" on its earnings this year.

The move is in accordance with the Covid-19 (Temporary Measures) (Amendment) Act in Singapore, which requires landlords to provide SME tenants with additional rental relief amid the pandemic.

Under the government's new rental relief framework, SMEs that have seen a significant drop in their average monthly revenue will receive an additional two months' waiver of their base rentals if they are located in qualifying commercial properties, or an additional one month's waiver of base rentals if they are located in industrial and office properties.

These additional rental waivers will be borne by the landlord and applied to June and July 2020 for SMEs in qualifying commercial properties, and May 2020 for SMEs in industrial/office properties, as long as their leases or licences were in force on April 1.

Shares in CapitaLand closed at S$3.06 on Monday, up two cents or 0.7 per cent, following its profit guidance.